Olympic Steel Inc. (ZEUS, Financial) filed Quarterly Report for the period ended 2009-06-30.
OLYMPIC STEEL INC. is a specialized steel service center that processes and distributes flat- rolled carbon stainless and tubular steel products. Co. operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. Co. purchases flat-rolled steel typically from steel producers and responds to its customers\' needs by processing steel to customer specifications and by providing critical inventory and just-in-time delivery services. Olympic Steel Inc. has a market cap of $271.8 million; its shares were traded at around $25.01 with a P/E ratio of 9.5 and P/S ratio of 0.2. The dividend yield of Olympic Steel Inc. stocks is 0.3%. Olympic Steel Inc. had an annual average earning growth of 19.4% over the past 5 years.
For the second quarter of 2009, loss before income taxes totaled $54.3 million compared to income of $47.2 million in the first quarter of 2008. For the first six months of 2009, loss before income taxes totaled $96.5 million, compared to income of $68.4 million in the first six months of 2008. An income tax benefit of 38.6% was recorded for the first six months of 2009, compared to a tax provision of 37.5% for the first six months of 2008. The majority of the 2009 losses can be carried back to prior years, resulting in future income tax refunds. Income taxes refunded, net of income taxes paid, during the first six months of 2009 totaled $2.0 million, compared to $20.0 million of income taxes paid during the first six months of 2008.
Net loss for the second quarter of 2009 totaled $33.8 million or $3.11 per basic and diluted share, compared to net income of $29.6 million or $2.70 per diluted share for the second quarter of 2008. Net loss for the first six months of 2009 totaled $59.3 million or $5.45 per basic and diluted share, compared to net income of $42.8 million or $3.93 per diluted share for the first six months of 2008.
Working capital at June 30, 2009 totaled $177.5 million, a $75.7 million decrease from December 31, 2008. The decrease was primarily attributable to a $30.3 million reduction in accounts receivable (resulting from lower sales volumes and sales prices) and a $131.7 million reduction in inventories (inclusive of inventory lower of cost or market adjustments), partially offset by a $29.3 million increase in income taxes receivable and deferred, a $41.6 million reduction in accounts payable (associated with lower steel prices and reduced steel purchases) and a $13.4 million reduction in accrued expenses (primarily associated with lower incentive compensation).
In July 2009, our Board of Directors approved a regular quarterly dividend of $0.02 per share, which is payable on September 15, 2009 to shareholders of record as of September 1, 2009. Our Board previously approved 2009 regular quarterly dividends of $0.05 and $0.02 per share, which were paid on March 16, 2009 and June 15, 2009, respectively. Regular dividend distributions in the future are subject to the availability of cash, the $2.25 million annual limitation on cash dividends under our revolving credit facility, and continuing determination by our Board of Directors that the payment of dividends remains in the best interest of our shareholders.
tested monthly, commencing with the month ended June 30, 2010; (iii) a maximum leverage ratio of 1.75, tested quarterly; (iv) commencing with the month ending April 30, 2009, consolidated EBITDA of no less than ($5,000,000) for (a) the one month period ending April 30, 2009, (b) the two month period ending May 31, 2009, and (c) for the three month period ending June 30, 2009 and the three month period ending with each subsequent month thereafter until and including May 31, 2010; commencing with the month ending April 30, 2009 through and including the month ending May 31, 2010, a cumulative consolidated EBITDA for such period of no less than ($10,000,000); (v) limitations on dividends, capital expenditures and investments; and (vi) restrictions on additional indebtedness. All EBITDA covenants exclude up to $100 million of inventory lower of cost or market adjustments. As of June 30, 2009 we were in compliance with our covenants under the credit facility. At July 24, 2009, our bank debt totaled $20 million we had approximately $44 million of availability under the credit facility.
Read the The complete ReportZEUS is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
OLYMPIC STEEL INC. is a specialized steel service center that processes and distributes flat- rolled carbon stainless and tubular steel products. Co. operates as an intermediary between steel producers and manufacturers that require processed steel for their operations. Co. purchases flat-rolled steel typically from steel producers and responds to its customers\' needs by processing steel to customer specifications and by providing critical inventory and just-in-time delivery services. Olympic Steel Inc. has a market cap of $271.8 million; its shares were traded at around $25.01 with a P/E ratio of 9.5 and P/S ratio of 0.2. The dividend yield of Olympic Steel Inc. stocks is 0.3%. Olympic Steel Inc. had an annual average earning growth of 19.4% over the past 5 years.
Highlight of Business Operations:
Interest and other expense on debt totaled $1.1 million for the second quarter of 2009 compared to $160 thousand for the second quarter of 2008. Interest and other expense on debt totaled $1.3 million for the first six months of 2009, compared to $187 thousand for the first six months of 2008. Our effective borrowing rate, exclusive of deferred financing fees and commitment fees, for the first six months of 2009 was 3.4% compared to 4.4% in the first six months of 2008. The increase in 2009 interest and other expense on debt was primarily attributable to higher overall borrowing levels and lower amounts of interest capitalized into long-term projects. In April 2009, as a result of deteriorating market conditions and our inventory lower of cost or market adjustment, we obtained a bank amendment to modify certain financial covenants on our revolving credit facility. As part of the amendment, our average cost of borrowings, exclusive of deferred financing fees and commitment fees has increased and is expected to approximate 5% to 6% for the remainder of 2009.For the second quarter of 2009, loss before income taxes totaled $54.3 million compared to income of $47.2 million in the first quarter of 2008. For the first six months of 2009, loss before income taxes totaled $96.5 million, compared to income of $68.4 million in the first six months of 2008. An income tax benefit of 38.6% was recorded for the first six months of 2009, compared to a tax provision of 37.5% for the first six months of 2008. The majority of the 2009 losses can be carried back to prior years, resulting in future income tax refunds. Income taxes refunded, net of income taxes paid, during the first six months of 2009 totaled $2.0 million, compared to $20.0 million of income taxes paid during the first six months of 2008.
Net loss for the second quarter of 2009 totaled $33.8 million or $3.11 per basic and diluted share, compared to net income of $29.6 million or $2.70 per diluted share for the second quarter of 2008. Net loss for the first six months of 2009 totaled $59.3 million or $5.45 per basic and diluted share, compared to net income of $42.8 million or $3.93 per diluted share for the first six months of 2008.
Working capital at June 30, 2009 totaled $177.5 million, a $75.7 million decrease from December 31, 2008. The decrease was primarily attributable to a $30.3 million reduction in accounts receivable (resulting from lower sales volumes and sales prices) and a $131.7 million reduction in inventories (inclusive of inventory lower of cost or market adjustments), partially offset by a $29.3 million increase in income taxes receivable and deferred, a $41.6 million reduction in accounts payable (associated with lower steel prices and reduced steel purchases) and a $13.4 million reduction in accrued expenses (primarily associated with lower incentive compensation).
In July 2009, our Board of Directors approved a regular quarterly dividend of $0.02 per share, which is payable on September 15, 2009 to shareholders of record as of September 1, 2009. Our Board previously approved 2009 regular quarterly dividends of $0.05 and $0.02 per share, which were paid on March 16, 2009 and June 15, 2009, respectively. Regular dividend distributions in the future are subject to the availability of cash, the $2.25 million annual limitation on cash dividends under our revolving credit facility, and continuing determination by our Board of Directors that the payment of dividends remains in the best interest of our shareholders.
tested monthly, commencing with the month ended June 30, 2010; (iii) a maximum leverage ratio of 1.75, tested quarterly; (iv) commencing with the month ending April 30, 2009, consolidated EBITDA of no less than ($5,000,000) for (a) the one month period ending April 30, 2009, (b) the two month period ending May 31, 2009, and (c) for the three month period ending June 30, 2009 and the three month period ending with each subsequent month thereafter until and including May 31, 2010; commencing with the month ending April 30, 2009 through and including the month ending May 31, 2010, a cumulative consolidated EBITDA for such period of no less than ($10,000,000); (v) limitations on dividends, capital expenditures and investments; and (vi) restrictions on additional indebtedness. All EBITDA covenants exclude up to $100 million of inventory lower of cost or market adjustments. As of June 30, 2009 we were in compliance with our covenants under the credit facility. At July 24, 2009, our bank debt totaled $20 million we had approximately $44 million of availability under the credit facility.
Read the The complete ReportZEUS is in the portfolios of Kenneth Fisher of Fisher Asset Management, LLC.
